Blame it on a reseller

A Brazilian judge has ruled that six people connected with Cisco must stay in temporary custody while tax fraud allegations against the networking giant are investigated.

Three other people have also been imprisoned, according to the FT. Police raids in mid-October saw 40 people arrested following police and tax raids; these included Cisco staff as well as government officials. The two-year investigation relates to unpaid tax on $500m of electronic equipment over the last five years - which would have brought more than $800m in tax, interest and fines to the Brazilian exchequer.

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Cisco put out a statement on 21 October welcoming the release of three staff including its Brazilian country manager Pedro Ripper. It said that only four of the 44 original arrests were of Cisco staff.

The networking giant denied any wrongdoing, stating: "In the review of the facts that we've been able to undertake, we do not believe Cisco has acted inappropriately. Key to our evaluation, we would note that Cisco does not import products directly into Brazil, but relies on resellers."

The networking giant said it was cooperating with the authorities and also conducting an internal review.